tag:blogger.com,1999:blog-4102429195693595750.post264700198993540230..comments2024-03-22T05:15:17.042+02:00Comments on Sudden Debt: Swallowing The Hog WholeHellasioushttp://www.blogger.com/profile/03564511281240682625noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4102429195693595750.post-26697489352357320172007-07-27T16:21:00.000+03:002007-07-27T16:21:00.000+03:00The reason for the blog's existence was/is to unde...The reason for the blog's existence was/is to underscore the danger of the situation. The financial system is a web of interconnections based on one thing only: trust, also known as credit in banking. <BR/><BR/>Prior to now we have had no hard numerical measure of trust. Now we do: Credit Default Swaps measure the "trust" or "creditworthiness" of just about every major borrower. <BR/><BR/>In a twist of fate, the product that was supposed to lower risk (CDS) may actually create a meltdown episode as everyone now has the ability to clearly and measurably see risk go up and up (trust going lower and lower) and thus rush for the exits.<BR/><BR/>RegardsHellasioushttps://www.blogger.com/profile/03564511281240682625noreply@blogger.comtag:blogger.com,1999:blog-4102429195693595750.post-77646504506230173462007-07-27T15:35:00.000+03:002007-07-27T15:35:00.000+03:00Great post.I'm stunned by the speed of the turn ou...Great post.<BR/><BR/>I'm stunned by the speed of the turn out. It looks like the end of the party is near, possibly very near. <BR/><BR/>It's a pity in a sense this great blog may become plain mainstream talk within a couple of weeks.<BR/><BR/>The next question is: how dangerous is the situation going to be? <BR/><BR/>Is the banking system robust enough to withstand a really tough financial crisis? <BR/><BR/>Can technically "real banks" go bankrupt? <BR/><BR/>I heard that they cannot since they have direct refinancing from central banks. How tested is that proposition?Anonymousnoreply@blogger.com